In the logistics and freight industry, acronyms abound—but few are as commonly used or as valuable to understand as FAK. It is a pricing method used by carriers to simplify the transportation of goods with different freight classes. Instead of rating each product individually, the carrier assigns a single freight class and price to a group of commodities. This approach offers significant cost and efficiency benefits for both shippers and carriers.Let’s dive deeper into the meaning, use cases, benefits, and considerations of FAK in the shipping industry.
1.What Does FAK Mean in Shipping?
FAK (Freight All Kinds) is a freight classification and pricing strategy that allows various types of goods—regardless of their individual freight class—to be grouped under a single, standardized rate.
Normally, the National Motor Freight Classification (NMFC) assigns every item a class (ranging from Class 50 to 500) based on factors such as density, stowability, ease of handling, and liability. However, using FAK allows shippers to bypass this detailed classification process when working with a particular carrier or under a specific agreement.
In essence, instead of quoting shipments at different rates based on each item’s freight class, a carrier may offer a flat rate for all commodities, simplifying rate structures and reducing surprises.
2.Who Uses FAK and When?
FAK agreements are especially useful for:
- Frequent Shippers who move different types of cargo in mixed loads.
- Third-Party Logistics Providers (3PLs) who consolidate multiple customer shipments.
- Businesses shipping Less-than-Truckload (LTL) freight with variable cargo types.
- Importers or exporters managing FCL (Full Container Load) or LCL (Less-than-Container Load) sea freight.
For example, if you’re shipping clothing (typically Class 150) and canned food (Class 65), FAK allows both items to be moved under a single, averaged class such as Class 100. This not only simplifies billing but also creates predictable freight costs.
3.Benefits of FAK Rates
You don’t need to classify every single product according to NMFC rules. This simplifies booking, documentation, and handling.
Averaging freight classes can protect high-class items from incurring higher shipping fees. Shippers with mixed or high-class cargo benefit the most.
Shippers with strong volume or long-term relationships with carriers may secure favorable FAK contracts as part of their pricing agreement.
FAK cuts down on rating disputes, misclassifications, and chargebacks, especially in LTL shipments where freight classification errors are common.
4.How Is FAK Class Determined?
FAK rates are not standard across the board. They are typically:
- Negotiated between the carrier and shipper
- Based on historical shipment data (average classes, weights, and volumes)
- Often part of a contractual agreement or long-term partnership
- Subject to periodic review
The carrier may agree to ship all goods under a specific class (e.g., Class 100) provided that the cargo doesn’t include prohibited or hazardous materials, and that it generally falls within agreed guidelines.
5.Considerations and Limitations of FAK
While FAK is advantageous, there are a few things to keep in mind:
1.Not Available to Everyone
Carriers usually offer FAK pricing to high-volume customers or through broker arrangements. Smaller shippers may not qualify.
2.Commodities Must Still Be Compatible
Not all items are allowed under FAK rates. Goods that are fragile, hazardous, temperature-sensitive, or require special handling may be excluded.
3.Can Be Audited
If a carrier suspects abuse of the FAK agreement—such as shipping non-approved items—they may audit the freight and charge retroactive fees.
4.Rate Agreements May Vary by Mode
FAK is common in LTL trucking, but also used in ocean freight and air cargo with large freight forwarders. However, terms and conditions may differ significantly between carriers.
6.FAK in Different Transport Modes
| Transport Mode | Application of FAK | Notes |
|---|---|---|
| LTL Trucking | Most common use case | Simplifies rating for mixed commodity freight |
| FCL Ocean Freight | Applied by freight forwarders | Averages cargo types in a single container |
| Air Freight | Less frequent but possible | Often used in consolidated air cargo services |
| Rail Freight | Limited usage | Typically applies only in intermodal shipping |
7.FAK vs NMFC Classes: What's the Difference?
| Criteria | FAK | NMFC Class |
|---|---|---|
| Definition | Averaged freight rate for multiple items | Detailed freight rating system |
| Flexibility | High | Rigid |
| Complexity | Simple | Complex |
| Best For | Mixed shipments and high-volume shippers | Precise item classification |
| Used By | Negotiated carriers or 3PLs | All general freight shipments |
8.When Should You Use FAK?
Consider requesting FAK pricing when:
- You consistently ship different types of goods
- You want to simplify your supply chain
- You are negotiating a long-term shipping contract
- You’ve had issues with freight class misclassification
- You want more predictable freight costs
Working with a freight forwarder or 3PL who has existing FAK agreements with carriers can also give you access to these benefits—even if you’re not a large-volume shipper.
9.How to Get FAK Pricing
To negotiate FAK rates, you typically need to:
1.Review Your Shipping Data
Analyze past freight classes, volumes, and types.
2.Partner With a Carrier or Freight Forwarder
Choose a provider with experience in setting up FAK agreements.
3.Negotiate a Contract
Agree on rate structures, included commodities, volume thresholds, and exclusions.
4.Maintain Compliance
Follow the agreement terms and ensure accurate descriptions to avoid penalties.
Conclusion
So, what is FAK? Simply put, it’s a shipping strategy designed to simplify and reduce costs in a complex logistics world. If your business deals with mixed freight classes and you’re looking for a more predictable, streamlined, and cost-efficient shipping method, FAK may be a game-changer.However, it requires the right partner and proper negotiation. Not all shipments qualify, and oversight is essential to stay within the bounds of your agreement.
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FAQs
Q1: Can small businesses access FAK rates?
Generally, small businesses do not qualify for FAK unless they work through a freight forwarder or broker who has FAK agreements with carriers.
Q2: What are the benefits of FAK for shippers?
FAK simplifies pricing, reduces the risk of reclassification charges, lowers freight costs for high-class items, and makes billing more predictable.
Q3:Does FAK eliminate the need to classify shipments?
While FAK simplifies classification, shippers still need to provide accurate descriptions, weights, and packaging details. Carriers may audit shipments for compliance.
Q4: Can hazardous or perishable goods be shipped under FAK?
Most FAK agreements exclude hazardous, perishable, or restricted items due to handling and liability concerns.
Q5:Is FAK used in international shipping?
Yes. FAK is often applied in international LCL (Less-than-Container Load) and FCL (Full Container Load) shipping to standardize pricing for mixed cargo.